ANDY YATES: Can a revolution of socially-minded entrepreneurs save the world?

In our regular series Andy Yates explores the weird and wonderful world of business life. Yates is an experienced entrepreneur, adviser and mentor and investor-director at Huddlebuy.co.uk- Europe’s largest daily money-saving site for small businesses.

What have these businesses got in common? They are part of the growing entrepreneurial revolution that could change society.

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Welcome to the world of social
enterprise. And it promises to change the way we all interact with, and
feel about, entrepreneurs and business.

Social enterprise is not new.
Victorian philanthropists, appalled by the inequalities of everyday
life, set about creating entrepreneurial charities, mutuals,
co-operatives, industrial and provident organisations.

The seeds of modern-day social
enterprise were sown in groundbreaking initiatives such as The Big Issue
or commercial organizations such as The Body Shop, which proved there
was room for a mainstream business with a social conscience.

The Eden Project, Jamie Oliver’s
restaurant Fifteen, Café Direct - the UK’s largest Fairtrade hot drinks
company and Fair-trade chocolate company Divine Chocolate, co-owned by
Ghanaian cocoa farmers, are the poster children of the current social
enterprise sector.

The latest authoritative Government
data from 2010 suggests there are about 68,000 social enterprises in the
UK, contributing £24bn to the economy and employing 800,000 people.

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But this underestimates the real
growth in the sector over the last few years. A social enterprise
revolution is well underway. A new breed of entrepreneurs are turning
their backs on traditional careers to put something back into society.
From health and education to tackling waste and poverty - new
technology, new practices and new solutions are creating a new way of
doing things.

Take pioneering programmes like the
Big VentureChallenge (www.bigventurechallenge.com). Created by UnLtd, a
charity that backs and supports social entrepreneurs, it promises to
change the social enterprise landscape in the UK. Following a successful
pilot, UnLtd has just secured an groundbreaking partnership with the
Big Lottery Fund. The new programme will provide expert support for 100
of the best and brightest social enterprises, projects that can create a
scalable and sustainable difference to lives in the UK. £5m of funding
is also available to match against new investment for those selected.
The call-out for ambitious and aspiring social enterprises is open now
and closes in early February.

The new Impact Investments fund from
Nesta (www.nestainvestments.org.uk) - a charity that backs innovation -
is also a defining initiative that backs businesses that are trying to
solve some of our most serious social problems - a rapidly aging
population, chronic youth unemployment and fuel poverty, to give just a
few examples.

Game of thrones: The waterless Loowatt toilet, which stores human waste within biodegradable film in the most efficient way possible, is an example of social enterprise.

Then there is the 'big daddy' of the
social investment world - Big Society Capital. Launched last year it is a
financial institution tasked with developing a sustainable social
investment market in the UK. Backed by up to £400m worth of deposits
transferred from dormant bank accounts, it is backing financial
intermediaries in the social sector - organizations that are supporting
those that aim to tackle important social problems.

The roots of the new social enterprise
revolution have been sown by savage cutbacks in public spending and
grants, hitting public services and charities alike. This has created a
new breed of social enterprises that know they have to stand on their
own two feet and have to create a sustainable (and this implies
profitable) business model to survive.

This has created plenty of controversy
and, in many ways, could prove to be the defining debate of this
decade. Should social entrepreneurs be able to make money for themselves
and for shareholders and backers or should it be ploughed back into
society?

On a bigger scale, should larger public services be outsourced to a new breed of private operators, ranging from Virgin to 02?

So let me enter the fray (and probably
get some flack for doing so). From an entrepreneur's perspective, I
still see a sector starved of capital. Growing inequality of wealth
means the world’s social problems are getting worse rather than better.
There is a crying need to attract support from everywhere - from angel
investors, to the wider investment community and, yes, from corporates,
too. The social enterprise sector needs to adopt a grown-up business
attitude if it is to mature. It needs impact investors to make a real
impact.

So far, many social entrepreneurs and
enterprises that I see do a sterling job at a community level - but
haven’t created meaningful impact at scale.

And if entrepreneurs can clearly prove
they are creating (and will carry on creating) a meaningful and
measurable social impact - creating real cost savings or inventing new
and better ways of doing things - I don’t see why they cannot share in
society’s gain.

The bottom line is we now need bigger
and better social enterprise success stories in the UK or a new dawn
will turn out to be another false dawn.

I personally don’t mind if these are
done through not-for-profit or for-profit vehicles, as long as they
produce the backing, innovation, impact and measurable change that is
desperately needed.

To succeed, the social enterprise
sector needs to do all it can to attract the best entrepreneurial talent
- which is why initiatives like the Big Venture Challenge are so
important and why I want to do all I can to help the social enterprise
sector become that much more enterprising.